The group will soon control nearly half of the world’s total oil output, calculations show
© Getty Images / ANDRZEJ WOJCICKI
The BRICS group of nations is on course to change the power balance in the global energy market, InfoTech news outlet reported on Thursday, citing calculations based on 2022 OPEC data on oil exports and production.
According to the calculations, once the group expands after adding six new nations to its ranks, it will control nearly half of the world’s oil production and reserves.
BRICS currently consists of Brazil, Russia, India, China, and South Africa. However, at the summit in Johannesburg this week, the group announced that Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates will officially join in January 2024.
According to the report, the group will greatly increase its weight in the oil market with the inclusion of Saudi Arabia, the UAE, and Iran. Along with current members Russia and Brazil, these nations combined control 39% of the world’s total oil exports, or 17.1 million barrels per day (bpd). The 11 nations of the expanded BRICS will account for around 47.6% of the world’s total oil production, data shows.
In terms of oil reserves, BRICS will also control nearly half of the world’s total, 719.5 billion barrels out of 1.6 trillion. If Venezuela, which has also recently applied for membership, is accepted into its ranks, the group’s control will be even greater – around 65.4%. In comparison, the G7 group of leading economies (The US, UK, Germany, Italy, Canada, France, and Japan) controls only 3.9% of known crude reserves.
Analysts note that the expansion of BRICS to the Gulf countries is likely to see the US lose its influence in the global oil market.
“Saudi Arabia and the UAE joining is… extremely significant. The United States used to rely on the Gulf monarchies, especially Saudi Arabia, to exert control over the oil price. With their accession to BRICS, it seems likely that America has lost any control it had over oil prices for the foreseeable future,” Irish economist Philip Pilkington said in an article for the British portal UnHerd.
According to Pilkington, the outcome of this week’s BRICS Summit also symbolizes the end of Iran’s economic isolation.
“Given that the country is the world’s eighth largest oil producer and possesses the third largest proven oil reserves, this is a substantial economic and geopolitical development,” he stated.
For more stories on economy & finance visit RT’s business section
